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Monday Feb 04, 2013

Best way to handle tenants' deposits

All landlords are entitled to take deposits as security from their tenants, and one to two months' rent is a reasonable amount, says Michael Bauer, general manager of property management company IHFM.

If tenants don't keep rented properties in the condition in which they were received - except for normal wear and tear - or fail to pay their rent, landlords may use these funds towards repairs or cleaning costs. Any interest accrued on the deposit held must be added to deposit refunds paid to tenants at the end of leases.

Bauer says landlords can claim for items on the property that are damaged by tenants or their guests, as well as for cleaning expenses - for example, if the carpets were clean when the tenant moved in, but when moving out there are pet or beverage stains.

"Landlords c an deduct money from deposits if there are outstanding amounts on the water bill or other services not paid for. If items from the house are missing, such as door handles, access cards or keys, tenants are responsible for the cost of replacing these. Obviously, unpaid rent can also be deducted from deposits.

"It is important to complete condition reports before new tenants move in. Ideally, landlords (or their agent's agent) should walk through properties to let with the tenants, noting items that are not in perfect order or that need to be replaced before the keys are handed over.

"If possible, take photographs of the rooms, so you have proof of their condition, and attach these to the lease agreement. This will help if there are disagreements later. When vacating the premises, tenants should be allowed three days to remedy any damage."

Michael Bauer is a regular contributor to www. l essor. See, call 083 255 4442 or email

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